In the context of the external economic environment, Johnson Matthey performed well in the six months to 30th September 2009. Sales and profits were however lower than last year’s peak as the business was impacted by the slowdown in automotive markets and the fall in the price of platinum group metals.

Looking forward, visibility of global vehicle sales remains limited. Whilst light duty vehicle sales improved in the second quarter of our financial year and current indicators suggest that we may have seen an end to de-stocking by the car companies, the timing of a return in consumer confidence and the impact of the expiry of car scrappage schemes will be key factors in driving demand in the months ahead. A recovery in heavy duty diesel vehicle sales in the key European and North American markets is equally hard to predict. However, new tighter emission standards for on road HDD vehicles in North America come into force on 1st January 2010, substantially increasing our potential catalyst sales per vehicle. Whilst truck sales in both Europe and North America in our first half have been well down on the same period last year, October saw some signs of improvement in North America and perhaps the beginning of a pre-buy effect ahead of the 2010 legislation. It is too early to say if this is a sustainable trend, however we have leading technology and a strong market share and are well positioned to benefit from growth as the market recovers. Process Technologies is well placed to continue to grow in the second half of this year with good demand for petrochemical projects and the launch of new products that enhance our leading position in the methanol market. Overall, Environmental Technologies Division’s operating profit in the second half of this year is expected to be significantly up on the same period last year.

Pgm prices have gradually improved over the last few months, in contrast to the significant volatility this time last year. At current prices, profits from our Platinum Marketing and Distribution business in the second half of the year are likely to be slightly ahead of the first half. Our manufacturing, refining and catalysts and chemicals businesses should also benefit from higher pgm and gold prices and a gradual return of business confidence. Results for Precious Metal Products Division are therefore expected to improve further in the second half of the year but are unlikely to match those for the second half of last year.

Fine Chemicals Division is more predictable and is expected to deliver steady growth for the full year even if the one-off benefit associated with the launch of ADDERALL XR® is excluded.

Our strategy to develop our businesses on a global scale will continue to benefit us through exposure to the growth markets of China and India, helping to offset weaker markets in the United States and Europe. Whilst visibility remains limited in some of our end user markets, the group is well placed to benefit from economic recovery. The outlook for the full year is in line with current market expectations.

Looking further ahead, the long term legislative and environmental drivers for our businesses remain firmly in place. We continue to invest in our technologies, our manufacturing infrastructure and our people. Johnson Matthey is well positioned to return to growth in the near future.